Car loan rates

In the market for a new set of wheels and need to find the best car loan rates around? Then you’ve come to the right place! Here at Mozo we compare car loan rates from a range of banks to help you find the best value.

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Car loan interest rates: why are they so important?

When you take out a car loan to pay for your new set of wheels, the interest rate is a big part of determining how much it will cost you.

Interest rates on car loans can vary widely, so the difference between the cheapest car loan rates and the most expensive can mean thousands of dollars for your bottom line. So it’s well worth taking the time to sit down and crunch the numbers to find the best rate available.

Where can I find the cheapest car loan rates?

With so many car loans on offer, it can be tricky to work out which one is the best value for your needs. That’s why it’s important to do your research thoroughly, and compare options from the big banks, smaller customer-owned lenders, peer-to-peers and online lenders.

We’ve made it easy to compile a shortlist and see your options side-by-side with our car loan comparison table and search tool below.

Can I apply for a car loan online?

Absolutely - in fact, you can apply for a car loan from our comparison table. All you need to do is click the blue ‘go to site’ button when you find an option you like the look of. That will take you through to the lender’s website, where you can get more information or start your application.

Car loan rate comparisons on Mozo - page last updated February 23, 2020

interest rate
comparison rate*
monthly repayment**

I want to borrow

years

  • 5.49% p.a.

    5.73% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 5.49% would cost $34,548.78 including fees.

      Compare
    Details
  • 5.50% p.a.

    5.85% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 5.50% would cost $34,632.09 including fees.

      Compare
    Details
  • mozo-experts-choice-2019

    4.89% p.a.

    5.44% p.a.based on $30,000
    over 5 years

    Terms from 3 to 5 years. Representative example: a 5 year $30,000 loan at 4.89% would cost $34,277.58 including fees.

      Compare
    Details
  • 4.99% p.a.

    5.26% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 4.99% would cost $34,158.97 including fees.

      Compare
    Details
  • 5.99% p.a.

    6.63% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 5.99% would cost $35,290.67 including fees.

      Compare
    Details
  • 7.99% p.a.

    8.35% p.a.based on $30,000
    over 5 years

    Terms from 1 to 10 years. Representative example: a 5 year $30,000 loan at 7.99% would cost $36,738.90 including fees.

      Compare
    Details
  • mozo-experts-choice-2019

    4.19% p.a.

    4.73% p.a.based on $30,000
    over 5 years

    Terms from 3 to 5 years. Representative example: a 5 year $30,000 loan at 4.19% would cost $33,704.30 including fees.

      Compare
    Details
  • 6.79% p.a.

    7.16% p.a.based on $30,000
    over 5 years

    Terms from 1 to 7 years. Representative example: a 5 year $30,000 loan at 6.79% would cost $35,729.09 including fees.

      Compare
    Details
  • 5.64% p.a.

    5.99% p.a.based on $30,000
    over 5 years

    Terms from 1 to 10 years. Representative example: a 5 year $30,000 loan at 5.64% would cost $34,748.53 including fees.

      Compare
    Details
  • 4.69% p.a.

    6.03% p.a.based on $30,000
    over 5 years

    Terms from 3 to 7 years. Representative example: a 5 year $30,000 loan at 4.69% would cost $34,752.17 including fees.

      Compare
    Details

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*The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

**Representative example figures and monthly repayment figures are estimates only, based on the advertised rate, mandatory fees, loan amount and term entered. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Car Loans Awards

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Car loan rates, explained

Whether you’re refinancing your current car loan or picking out a new car loan for your wheels, comparing the best car loan rates to find your perfect fit is a really important first step in the process. To get you started, we’ve answered some of the most commonly asked questions about car loan rates below.

What’s the best car loan interest rate around?

Unfortunately, that’s almost impossible to answer! Lenders change their interest rate offerings all the time, so there’s no one ‘best’ car loan interest rate we can point you to. Plus, a bunch of other factors go into the decision of which car loan is best for you, like what features it offers, what fees are involved, whether you opt for a secured or unsecured loan and your own personal financial situation.

The good news is, you can still find some of the cheapest car loan rates around by doing a price comparison before putting in an application. And that’s where Mozo’s car loan search tool comes in.

What factors affect car loan interest rates?

There can be a huge difference between the best car loan rate in the market and the worst - so you might be wondering just how interest rates are decided. Here are some of the things that can make a big difference to what interest rate is on offer.

  • Secured vs unsecured. Many car loans are secured, because you can use the car you’re buying as security against the loan, and this is good news since secured car loan interest rates are often lower than those for unsecured options. This is because having an asset up as collateral minimises the risk for the lender in case you default on the loan.
  • Fixed vs variable. Another factor that might influence the interest rate on a car loan is whether it’s a fixed or variable rate. Fixed rates don’t change for the term of your loan, which means you get the security of always knowing what your monthly repayment will be. Generally speaking, they’re a bit higher, because a lender needs to price in the chance that rates will go up during your term. On the other hand, variable rates change with the market, so they could rise or fall at any time during your loan term.
  • Features. As a rule of thumb, you should remember that the more features a car loan has, the more likely it is to have a slightly steeper interest rate. You’ll pay a bit extra so that you have access to money-saving features like free extra repayments and a redraw facility - just remember to weigh up whether you’ll get enough use from these features to justify the extra cost.
  • Your credit score. If you’ve got a squeaky clean credit history, then it could help you to snag a cheap car loan rate, since some lenders reserve their best interest rates for borrowers with excellent credit.
  • Choice of lender. Different lenders offer different interest rates. Here at Mozo, we usually find that smaller, customer-owned or online lenders often offer better interest rates than the big banks.
  • Refinancing. If you are looking to switch do a different loan, your car loan refinance will likely come with a different rate, then if it's that's cars first loan.

How do I get the best car loan interest rate available?

With so many car loans on the market, how do you make sure you’re getting the best deal around? Here are a few of our top tips:

  • Keep your credit in tip top shape. Quite a few lenders offer different rates depending on your credit score - the cheapest car loan rates are reserved for borrowers with excellent credit. So in order to snag the best rate around, make sure you keep your credit healthy by meeting repayments on your credit card or mortgage, and make sure you understand what the shift to comprehensive credit reporting means for you.
  • Consider what you really need. Generally, if you opt for a car loan with all the bells and whistles, it will likely come with a higher interest rate (or steeper fees) than a basic option. This isn’t always a bad thing, because a few great features can help you save on interest, but it’s important to weigh up the benefits against the added cost and decide if you’ll really get enough value to justify a higher interest rate.
  • Don’t be afraid to ask for a better deal. One other way to make sure you’re getting the best bargain on your car loan finance rate is to haggle! Lenders are sometimes willing to negotiate on your loan interest rate, especially if you’ve done your homework and can show that the competition is offering a better deal. If you’re already a customer or are willing to move other financial products across to the same place, lenders may be willing to offer you a discount for bundling products as well.
  • Compare your options. Finally, if you want the lowest car loan rate around, it’s crucial to compare offers from a range of different lenders, because big banks won’t offer the same interest rates as small online lenders or peer-to-peer options. If that sounds like a lot of legwork and research don’t worry, that’s what Mozo’s car loan comparison table is for.

How does snagging a good car loan interest rate affect my monthly repayments?

The real reason finding the best car loan interest rate is important is because it ultimately affects how much you pay each month. And when it comes to car loans, interest rates can be wildly different depending on which lender and product you choose, ranging from below 5% to around 17% at the time of writing.

Our car loan comparison calculator shows that a difference of just 1% can mean hundreds of dollars over the life of a loan. For example, a $30,000 loan over 5 years with a rate of 6.99% is $855 cheaper than one with a rate of 7.99%.

Rates are indicative only and do not represent current products. Please see our table for up-to-date product rates.

Are car loan rates different for new and old cars?

Yes, whether you’re buying a pre-loved car or a brand new set of wheels will make a difference to the interest rate you pay. Generally speaking, used car loan rates are a bit higher than loans for new cars.

Why? It basically comes down to the fact that to a lender, a used car is a bigger financial risk than a new vehicle because it's more likely to have wear and tear, and a shorter lifespan. So they plan for this higher risk factor by charging more interest.

The tradeoff is that when buying a used car, you’ll probably need to borrow significantly less - which means you may pay less interest in the long run anyway.

Here’s an example of what we mean:

Based on average rates for new and used cars as of 23/5/18.

What else should I look for when comparing car loans?

While scoring the best car loan rate possible is super important, it’s not the only thing you need to think about when choosing a loan for your new set of wheels. You should think about the whole loan package and whether it’s a good deal. Here are a few things to check before signing up:

  • Loan term. Car loans generally come with a term between 1 and 5 years, though some are available for 7 year terms, or even longer. If you choose a longer term, then you’ll have smaller monthly repayments, but pay more interest in the long run. Choose a short car loan term and your monthly repayments will be higher, but you’ll save over the life of the loan.
  • Minimum and maximum loan amounts. Most car loans come with limits to how much you can borrow, so keep an eye on these when you’re comparing your options. Unless you’re looking for a particularly small or large loan, you shouldn’t have much trouble finding an offer to suit your needs.
  • Features.  Another thing to consider is what features are on offer. Things like being able to make free extra repayments and access a redraw facility can help you pay off your loan quicker. Being able to choose a monthly, fortnightly or weekly repayment schedule is also handy for fitting repayments in with your budget.
  • Fees. When considering the cost of a car loan, don’t forget to factor the fees into your planning! Aside from the interest rate on your car loan, fees are the next biggest expense you’ll have to plan for, and can include upfront application fees, ongoing service fees or exit fees when you pay your loan out in full.

One important tool to help you compare car loans on even footing is the comparison rate. This is shown next to the interest rate in our comparison table and takes into account the interest as well as any guaranteed fees included in the car loan. By looking at the comparison rate, you can get a more accurate idea of the ‘true cost’ of a loan.

How do I compare current car loan interest rates?

That’s the easy part. You can compare current car loan rates using our car loan comparison table above, or if you’d like to search for options specific to your needs, you can plug your loan amount and term into our car loan search tool. This works for if your getting a $5000 personal loan or a $50000 personal loan.

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